What the courts have decided on section 158BE, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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PCIT v Praveen Sawhney
High CourtHelps taxpayerNo later treatment found
The Department says my search assessment is in time because it made a reference to a foreign tax authority and gets a year excluded under s.153B. The reference was for years the treaty did not cover. Does the exclusion still apply?
No. Clause (ix) of the Explanation to s.153B excludes the time taken on a reference for exchange of information only where the reference is made in terms of the agreement under s.90 or s.90A. A request made outside what the treaty permitted is not such a reference, gives no exclusion, and the assessments were time-barred. Twenty-nine Revenue appeals were dismissed.
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CIT v S.K. Katyal
High CourtHelps taxpayer
The last panchnama only records the seals being broken and my keys being handed back. Does that date start the limitation clock?
No. The panchnama that fixes limitation is the one that records the conclusion of a search, and a document drawn up only to give effect to the revocation of a s.132(3) restraint order records no search at all. The Delhi High Court agreed with the Tribunal that such a panchnama is "merely a release order", so the search had concluded on the earlier date and the block assessment was out of time.
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Statutory position — section 158B: how the block period is built, and what "undisclosed income" now means
CBDT Circulars & InstructionsCuts both ways
The search on my client began on 12 February 2025 and the last panchnama is dated 9 April 2025. What exactly is the block period, and which date ends it?
The block period has two limbs. It is the previous years relevant to six assessment years preceding the previous year in which the search was initiated, PLUS the period starting on 1 April of the previous year in which the search was initiated and ending on the date of execution of the last of the authorisations. On your facts the search was initiated in the previous year 2024-25, so the second limb runs from 1 April 2024 to 9 April 2025 — the date of the last panchnama, not the date the search began and not 31 March 2025.
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Statutory position — section 158BD: the person who was not searched, and the two things that have changed for him
CBDT Circulars & InstructionsCuts both ways
Material seized in someone else's search has been passed to my client's Assessing Officer, who has issued a section 158BC notice. What is my client's block period, and from when does the department's time run?
Your client's block period is not computed from his own affairs at all — it is the block period of the searched person. Where there is one specified person relevant to him, the first proviso to section 158BD makes his block period the same as that person's; where there is more than one, it is that of the specified person whose block period ends on the later date. Time for the department runs under section 158BE(3): twelve months from the end of the quarter in which the section 158BC notice was issued to your client.
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Statutory position — section 158BE: the block assessment is barred twelve months from the end of the QUARTER, not the month
CBDT Circulars & InstructionsCuts both ways
The last panchnama in my client's search is dated 9 April 2025. By when must the block assessment order be passed?
Twelve months from the end of the QUARTER in which the last of the authorisations was executed — so, on those facts, from the end of the quarter ending 30 June 2025, which gives 30 June 2026, subject to the exclusions and extensions in the section. The old Chapter ran the period from the end of the MONTH; the substituted section 158BE runs it from the end of the quarter, which can add up to nearly three months to the department's time.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
